Procredit Holding Ag · XETR:PCZ
Procredit — H1 2024 Earnings Presentation
49 slides from Procredit's earnings presentation, Aug 14, 2024
Slide 1: H1/Q2 2024 results
Hubert Spechtenhauser, Chairman of the Management Board Christian Dagrosa, CFO and member of the Management Board H1/ Q2 2024 results Frankfurt am Main, August 2024
Slide 2: Agenda
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 1
Slide 3: Foundation of past years enabling strong business growth
Foundation of past years enabling strong business growth Strong foundation laid in the past two years H1 2024 as further step on our growth trajectory Strong growth metrics in H1-24 • Profitable in 2022 despite war in Ukraine, 2023 best year ever 6.9% 4.1% 5.0% loan growth deposit growth # clients
Slide 4: Highlights H1 2024: Strong business growth and good profitability
Highlights H1 2024 Strong business growth and good profitability Strong business development on the back of comfortable capitalisation 6.9% loan growth ► Loans grow by EUR 429m, increased growth momentum across all banks outside Ukraine (H1-23: 0.8%) ► Deposits grow by EUR 295m resulting in deposit-
Slide 5: H1 2024 results versus guidance
H1 2024 results versus guidance Guidance Actual FY 2024 H1 2024 Around 10% 6.9% ► Growth of the loan portfolio (FX adjusted) (6.7% FX adjusted) 10% – 12% 11.6% ► Return on equity (RoE) (based on up to 40bps cost of risk) (with cost of risk of 18bps) Around 63% ► Cost-income ratio (CIR) 64.1% (with m
Slide 6: Strong portfolio growth driven by all customers segments
Strong portfolio growth driven by all customers segments Loan portfolio growth ► Customer loans increase by EUR 429m or 6.9%, underscoring goals of updated group strategy for strong and granular growth 8.1% YoY 6.9% YTD ~60% of growth from lower-volume segments (Micro, Small 6,108 6,156 6,226 6,65
Slide 7: Strong deposit development through digital banking channels
Strong deposit development through digital banking channels Deposit growth ► Customer deposits increase by EUR 295m or 4.1% 16.9% YoY Private client deposits grow strongly by more than 8% 4.1% YTD (~90% of deposit growth in H1), signaling good progress of ProCredit’s direct banking strategy 7,254
Slide 8: B. Group results
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 7
Slide 9: Operating income and expense overview
Operating income and expense overview Operating income ► Strong increase in operating income yoy by EUR 28m or 14.6% 14.8% 14.6%, to EUR 220m 219.7 Continued positive trajectory of net interest income with yoy 191.8 increase of 16% 112.6 (in EUR m) 98.0 Net fee income with slight improvement yoy
Slide 10: Net interest income
Net interest income Quarterly development 3.9% ► Q2 NII on good level of EUR 90.5m, slightly above Q1 3.8% 3.6% 3.7% 3.6% In spite of EUR 2m additional interest expenses from Tier 2 bond (EUR 125m issued in April) Net interest margin in Q2 at 3.62%, down 4 bps vs. Q1; however, up by 4 bps on Q1
Slide 11: Net fee and commission income
Net fee and commission income Quarterly development ► Q2 net fee and commission income on good level of EUR 15.3m 8.4% growth with respect to Q1, mainly due to seasonally lower fee income in Q1 ► H1 net fee and commission income up EUR 0.5m or 1.6% 14.9 14.4 14.3 14.1 15.3 (in EUR m) Income up E
Slide 12: Personnel and administrative expenses
Personnel and administrative expenses Quarterly development ► Q2 personnel and administrative expenses of EUR 74.6m, up EUR 8.5m or 12.9% compared to Q1 61.7% 66.3% 62.9% 59.7% 57.1% 74.6 Average staff numbers up by ~200 or 4.8% 70.1 66.1 58.6 62.4 37.6 Expenses for internal IT development up ~1
Slide 13: Loss allowance
Loss allowance Quarterly development ► Q2 loss allowance of EUR 5.4m, corresponding to cost of risk of 33 bps Mainly driven by loss allowance booked for Ukrainian -9 bps 55 bps 42 bps 2 bps 33 bps portfolio of EUR 3.3m ► H1 loss allowance of EUR 5.7m, or 18 bps cost of risk EUR 4.0m additional m
Slide 14: Loan portfolio quality
Loan portfolio quality Loan portfolio by geography Net-write offs (annualised) Germany Ecuador 1% Moldova 7% 0.1% 0.4% 0.5% 0.0% 0.2% Bulgaria 3% 19% Georgia 7% Ukraine 7% Serbia Stage 2 Albania 14% 5% 8.8% 9.2% 8.6% 7.5% 8.1% Bosnia & Herzegovina 5% Kosovo Greece1 12% 6% Romania Macedonia 6% 8% Q2-
Slide 15: Regulatory capital, risk-weighted assets, capital ratios
Regulatory capital, risk-weighted assets, capital ratios Capitalisation overview ► CET1 ratio at 14.3% including recognition of H1-24 result in EUR m Dec-23 Jun-24 CET1 capital 885 937 Capital ratios well above regulatory capital requirements of Additional Tier 1 capital 0 0 9.3% CET1, 11.5% Tier
Slide 16: C. Regional performance
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 15
Slide 17: Contribution of regional segments to group net income
Contribution of regional segments to group net income Group functions, e.g. risk management, reporting, capital management, IT, liquidity management, training and development Includes ProCredit Holding, Quipu, ProCredit Academy Fürth, PCB Germany (EUR 38m loan portfolio; EUR 275m deposits) (H1-24, i
Slide 18: Segment South Eastern Europe
Segment South Eastern Europe Segment key financials SEE Individual bank development (H1-24) Operating income (€m) Cost-income ratio Country Profit after tax (€m) Cost-income Return on ratio equity +21% +0.4pp 146.4 Bulgaria 20.6 46.1% 20.6% 121.3 54.6% 55.1% Kosovo 13.7 47.9% 23.2% Serbia 10.6 53.4%
Slide 19: Segment Eastern Europe and South America
Segment Eastern Europe Segment key financials EE Individual bank development (H1-24) Operating income (€m) Cost-income ratio Country Profit after tax (€m) Cost-income Return on ratio equity +11% +4.2pp 48.2% Ukraine 11.2 44.0% 35.1% 30.3% 57.8 52.2 Georgia 6.5 56.4% 12.5% Moldova 2.4 73.6% 9.8% H1-2
Slide 20: D. Outlook
A. Highlights and business update B. Group results C. Regional performance D. Outlook ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 19
Slide 21: FY 2024 and medium-term outlook
FY 2024 and medium-term outlook FY 2024 outlook ► Growth of the loan portfolio Around 10% (FX adjusted) ► Return on equity (RoE) 10% – 12% (based on up to 40bps cost of risk) ► Cost-income ratio (CIR) Around 63% (with margin of +/- 1 ppt) > 13.0% CET1 ratio, c. 9% leverage ratio, ► CET1 ratio, lever
Slide 22: Q&A
Q&A ProCredit Academy, Fürth-Weschnitz, Germany
Slide 23: Appendix A. Impact reporting
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 22
Slide 24: Strong impact track record over the decades
Strong impact track record over the decades Consistently low net-write offs 5% Network of 4% Opening of the EV CHARGING Establishment of Published OUR RESPONSE 3% ProCredit academies STATIONS installed ProCredit as a ON FORCED LABOUR BANKING GROUP ALLEGATIONS related to 2% and consolidation of GREEN
Slide 25: Impact in ProCredit today
Impact in ProCredit today KPI: Jobs 200k jobs supported by our SMEs Jobs and investment KPI: Investment 64% of our lending goes to Social capital formation impact KPI: Gender Equity Diversity and 20% of our clients are inclusion women owned SMEs Sustainability at ProCredit Green energy KPI: Green Le
Slide 26: 2023 sustainability highlights and developments
2023 sustainability highlights and developments INTERNAL GREEN LENDING CLIENTS JOBS SUPPORTED EMPLOYEES ENVIRONMENTAL THROUGH OUR INDICATORS BUSINESS CLIENTS 61% 9,439 total number of business loan clients total number of employees 193,344 electric and hybrid total number of green loans 32,244 plug-
Slide 27: Appendix B. P&L and balance sheet
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 26
Slide 28: H1 2024 results at a glance
H1 2024 results at a glance In EUR m Q2-23 Q2-24 H1-23 H1-24 Y-o-Y Net interest income 80.2 90.5 155.7 180.6 24.9 Net fee and commission income 14.9 15.3 28.9 29.3 0.5 Other operating income (net) 2.9 6.8 7.2 9.8 2.6 Operating income 98.0 112.6 191.8 219.7 27.9 Income Personnel expenses 28.8 37.1 56
Slide 29: Overview of quarterly financial development
Overview of quarterly financial development In EUR m Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Net interest income 80.2 89.0 92.6 90.1 90.5 Net fee and commission income 14.9 14.4 14.3 14.1 15.3 Other operating income (net) 2.9 6.0 4.5 3.0 6.8 Operating income 98.0 109.4 111.4 107.2 112.6 Income Personnel expen
Slide 30: Balance sheet
Balance sheet in EUR m Dec-23 Jun-24 Assets Cash and central bank balances 2,348 2,110 Loans and advances to banks 372 420 Investment securities 751 807 Loans and advances to customers 6,226 6,656 Loss allowance for loans to customers -197 -195 Derivative financial assets 8 9 Property, plant and equ
Slide 31: Balance sheet development
Balance sheet development YTD asset development YTD liabilities and equity development (in EUR m) (in EUR m) ► Simple balance sheet structure with 63% of assets net loans to ► Liabilities and equity structure with 73% liabilities to customers, customers, 23% cash and cash equivalents and 14% other a
Slide 32: Appendix C. Loan portfolio
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 31
Slide 33: Structure of the loan portfolio by segment and currency
Structure of the loan portfolio by segment and currency Loan portfolio by segment Loan portfolio by currency 11% 3% 39% 50% 29% 57% 11% Medium Small Micro Private clients EUR USD Other Currencies ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 32
Slide 34: Development of green loan portfolio
Development of green loan portfolio Green loan portfolio growth ► Green loan portfolio amounting to EUR 1.3bn, representing 20% of total loan portfolio 15.4% 19.7% ► Includes financing of investments in: CAGR 2018-2023: 13% • Energy efficiency • Renewable energies 1,310 • Other environmentally-frien
Slide 35: Structure of collateral
Structure of collateral Collateral by type (FY 2023) ► Majority of collateral consists of mortgages ► Significant share of financial guarantees mainly as a result of InnovFin and other guarantee programmes provided by the European Investment Fund 1% 16% ► Clear, strict requirements for types of acce
Slide 36: Appendix D. Information on segment and bank level
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 35
Slide 37: Income statement by segment
Income statement by segment South Eastern 01.01.- 30.06.2024 (in EUR m) Germany Eastern Europe South America Consolidation Group Europe Interest and similar income 32.1 86.5 168.8 26.8 -21.5 292.7 of which inter-segment 12.9 4.8 3.8 0.0 0.0 0.0 Interest and similar expenses 31.6 37.5 46.8 17.7 -21.5
Slide 38: Segment South Eastern Europe
Segment South Eastern Europe Regional loan portfolio breakdown Key financial data Albania 6% Bosnia & Herzeg. (in EUR m) H1-23 H1-24 6% Bulgaria 25% 1 Net interest income 99.5 122.1 Greece 8% Net fee and commission income 18.4 19.1 Other operating income (net) 3.4 5.1 Romania 8% Operating income 121
Slide 39: Segment Eastern Europe
Segment Eastern Europe Regional loan portfolio breakdown Key financial data Moldova 18% (in EUR m) H1-23 H1-24 Net interest income 44.9 49.0 Net fee and commission income 3.5 3.1 Ukraine 43% Other operating income (net) 3.8 5.7 Operating income 52.2 57.8 Personnel expenses 8.9 9.8 Georgia Admininist
Slide 40: Segment South America
Segment South America Regional loan portfolio breakdown Key financial data (in EUR m) H1-23 H1-24 Net interest income 10.0 9.1 Net fee and commission income 0.1 0.1 Other operating income (net) -0.3 0.2 Ecuador 100% Operating income 9.8 9.4 Personnel expenses 4.1 4.9 Admininistrative expenses 5.9 7.
Slide 41: Key figures per ProCredit bank (as per H1 2024)
Key figures per ProCredit bank (as per H1 2024) North Bosnia & Country Bulgaria Serbia Kosovo Romania Macedonia Herzegovina Customer loan portfolio (EUR m) 1,638 934 837 539 410 333 Change in customer loan portfolio (%) 8.0% 2.9% 11.8% 6.1% 7.1% 11.6% Credit impaired loans (Stage 3) 1.0% 3.2% 1.3% 1
Slide 42: Key figures for ProCredit Bank Ukraine
Key figures for ProCredit Bank Ukraine Development since 2021, before Russian invasion in 2022 Quarterly KPI update (in EUR m) FY-21 FY-22 FY-23 Q1-24 Q2-24 Selected financial indicators Staff information Loan portfolio 757 582 497 Number of staff 346 347 % of group 12.8% 9.5% 8.0% Change qoq % 4.0%
Slide 43: Appendix E. Capital, liquidity and other information
Appendix A. Impact reporting B. P&L and balance sheet C. Loan portfolio D. Information on segment and bank level E. Capital, liquidity and other information ProCredit Group | H1 / Q2 2024 results | Frankfurt am Main, 14 August 2024 42
Slide 44: Successful Tier 2 placement in Apr-24
Successful Tier 2 placement in Apr-24 supporting the group’s medium-term growth ambitions CASE STUDY ProCredit Holding AG successfully placed EUR 125m Green Tier 2 Bonds Summary of transaction: Main statistics: ► On 25-Apr-24, ProCredit Holding successfully placed green ISIN DE000A383C84 Tier 2 subo
Slide 45: Funding, rating and liquidity
Funding, rating and liquidity Funding sources Deposit-to-loan ratio development Rating 1% 3% 1% 12% Customer deposits 117% 113% BBB (stable) ProCredit Holding rating Liabilities to banks by Fitch, last affirmed on Debt securities 23 June 2023 Subordinated debt 83% Other liabilities Dec-23 Jun-24 Tot
Slide 46: Strategic group positioning on SEE/EE with positive expected GDP development
Strategic group positioning on SEE/EE, with positive expected GDP development and increased international focus on the region GDP outlook for SEE/EE remains intact, well above Euro area Macroeconomic environment / key current themes SEE/EE Euro area • Last update of GDP growth estimates by IMF in Ap
Slide 47: Explanatory note on performance indicators and ratios
Explanatory note on performance indicators and ratios The ProCredit group uses an integrated system of indicators to monitor and The credit-impaired coverage ratio(8) gives insights into loss allowances for manage the implementation and further development of the group’s business credit-impaired l
Slide 48: Contact Investor Relations
Contact Investor Relations Financial calendar (continuously updated on IR Website) Date Location Event information 22.08.2024 Hamburg Hamburger Investorentage 14.11.2024 Quarterly Financial Report as of 30 September 2024 25.11.2024 – 27.11.2024 Frankfurt/ Main Deutsches Eigenkapitalforum 2024 Invest
Slide 49: Disclaimer
Disclaimer The material in this presentation and further supporting documents have been This presentation and further supporting documents may contain forward- prepared by ProCredit Holding AG, Frankfurt am Main, Federal Republic of looking statements including statements regarding our intent, belie